Your online business will have many separate parts that all need to work together, such as marketing, inventory, and finances. Each part is directly affected and influenced by the type of products you’re selling. This means that without a solid product line, your business faces an uphill battle before it even starts – if you don’t know what you’re selling, you can’t plan the other aspects of your online store.
Basic Ways to Find a Product to Sell
- Solve a customer pain point
- Appeal to enthusiastic hobbyists
- Go with your personal passion
- Consider your professional experience
Let’s take a look at each of these strategies to find out about products and deciding on them in more detail.
Solve a customer pain point
Solving a customer pain point will always be an effective way to develop a product people want. Tylenol wouldn’t be in business if literal headaches didn’t hurt. Abstract customer pain points, meanwhile, are usually about addressing poor or frustrating experiences with the current selection of available products.
Appeal to enthusiastic hobbyists
People with hobbies require large amounts of special products.
Go with your personal passion
While there are inherent risks in choosing a niche based on your own interests, it certainly doesn’t have to be a recipe for disaster. Using your know-how to create and position a unique product can be extremely profitable.
Consider your professional experience
Has worked in a particular industry helped you learn the ins and outs? Maybe you have a skill or a particular set of experiences that makes you more knowledgeable than the average person on a particular topic. Turning your expertise into your own online business is a smart way to enter the market with a leg up that isn’t easy for others to duplicate or copy.
Capitalize on trends early
Recognizing a trend early enough can be a significant win for a new business. It allows you to carve out a place in the market and establish yourself as a leader before others have a chance to. And thanks to the nature of digital marketing, your paid spend will probably be lower and opportunities to build long-term SEO traffic may be more abundant.
Here are a few ways to keep an eye on what’s trending so you can act quickly on potential opportunities:
Read customer reviews on existing products
Whether you already sell products online or not, there is a wealth of insight you can glean from customer reviews.
Find product opportunities in keywords
It’s no secret that organic traffic from search engines is an important marketing channel. Searching for keyword opportunities means strategically looking for a product based on the search queries people are using, the number of searches per month, and overall competition for those searches.
Here are a few tools you can use to uncover popular search terms, which may help you find the next product to sell:
It’s true that deciding what products to sell can be rather difficult, as there are literally millions of options to choose from. Not only that, you need to ensure there’s a market for your products and that you can actually make money from selling them. (After all, we’re all in business to make money, right?)
Even more, the products you sell are a prime factor in shaping other details that impact your online business. For example, if you decide to sell refrigerators, how will you ship this massive item across the country? Or, if you’re selling wine, what legal restrictions do you face when selling to different states and geographies? Are there any additional taxes that need to be paid?
The products you sell online directly impact the following:
- Branding & design: If you’re selling auto parts, you probably wouldn’t want to give your website a pink background and frilly logo, right? Your brand should reinforce your product line, so make sure they match well. Check out your competitors to see what sort of designs they’re using.
- Marketing: The marketing outlets you choose, along with your marketing budgets, are dependent on your target audience, which is fully determined by your product offering. For best results, make a plan to market across more than one channel, such as advertising on Facebook and within search results pages.
- Your sanity: Keep in mind that you’ll be spending lots of time with these products, so only sell something if you find it interesting and won’t get bored with it soon.
Figuring out what to sell online and who to target is a decision that shouldn’t be taken lightly.
Try to figure out the information about your audience:
- Basic demographics: Demographics are statistical characteristics of a certain population or audience, such as age, gender, ethnicity, employment status, etc. Identifying the demographics of your target audience helps you better understand potential commonalities with this group.
- Psychographics: Unlike demographics, psychographics moves away from basic traits and focus on interests, activities, personalities and more. Once you understand the attitudes and behaviors of your target audience, you’ll be better equipped to appeal to their wants and needs.
- Price sensitivity: Do the prices of the products you plan to sell fall in line with the budgets of your target audience? In other words, do your products force you to focus on high-end customers, more economical shoppers or somewhere in-between?
Some factors to consider when defining your target audience:
- Customer motivation. Why is your customer searching for this item? What’s going to make them buy it? Are they concerned with price or retailer reputation? Are they purchasing a practical item, or a luxury good? Run through as many questions as you can while developing your customer profile.
- Your value add. There are probably plenty of retailers out there selling the exact same items as you. So how are you going to make your store stand out? Customers want value, but they also want experience. Find out what kind of experience they should have. This could be excellent merchandising, free shipping, stellar customer service or something else. Once you know what it is that you do better than the competition (such as being the only e-commerce store in your niche to offer free shipping), make sure to let your customers know why they should choose your store!
Here are some areas to investigate when figuring out what to sell:
If you already have an idea of what to sell online, start by seeing how well your idea is already performing. Or, if you’re unsure of what to sell, look at new trends to help inspire your decision. Keeping your finger on the pulse of the marketplace helps you gauge demand and recognize the various needs of your market.
Tip Make A Plan
Here are some quick resources to begin your research:
- Newspapers and magazines: Look at the lifestyle section of major newspapers and thumb through advertisements of popular magazines. If companies are paying big bucks to advertise these products, they’ve likely already identified a demand for them.
- Trade journals: If you’re looking to sell products that pertain to a specific industry, take a look at the social groups, publications, and professional organizations unique to that industry. Social media groups, forums, trade magazines and journals, conferences, and speaking with experts will all deepen your understanding of what your target audience thinks and feels. The more you understand your niche, the more opportunities you’ll be able to find.
- Product directories: Go online to see product listings for various drop shippers and wholesalers. These directories often have a wide selection, with filters, to help you isolate different product ideas. Even more, most include product photos and pricing information to give you a better idea of what you’d be selling
To begin your competitor analysis, try these approaches:
- Make a list of competitors: The first step is identifying who your competitors actually are. You can do so by performing a basic web search for the products you intend to sell. From there, you can see what other businesses exist in your space.
- Categorize your competitors: Once you have your list together, break it into logical categories. For example, you’ll have direct competitors that offer the same products as you, and larger competitors, such as big retail sites. You typically won’t want to go head-to-head against your biggest competitors at first – you’ll want to find gaps and opportunities that they’ve missed or are too big to compete for, as local search terms.
- Visit their websites: By visiting your competitors’ e-commerce sites, you’ll get a quick glimpse into the products that they prominently feature, along with information on their price points, branding, customer reviews, etc.
- Sign up for their emails: If your competitor has a place to subscribe to their emails, go ahead and do so. This allows you to see what promotions they’re running, and on which products. If they don’t have email signup, try referencing their social media channels instead. If a large competitor posts a quick fact on their social media that generates a lot of interaction, perhaps an in-depth examination of the topic would do well among your audience.
The main idea here is to understand how your competitors are pricing and presenting their products so you can find a balance between meeting industry standards and differentiating your products from everybody else. Don’t hesitate to identify and imitate what’s working for your competitors, but always make sure your store retains its own unique identity and voice.
Having reliable and competent suppliers is a crucial element of launching a new e-commerce store and needs to be a key consideration in the niche selection process.
There are three ways to obtain products, with varying costs associated with each:
- Self-made products: This approach is common for many craftspeople or hobbyists, or those who create products on their own. The primary product costs in this situation include the purchasing of materials and the storage of inventory, along with any labor and shipping costs. This method can be great for smaller ‘cottage industry’ e-commerce stores, but a plan to scale production to keep up with demand should be created early.
- Drop shipping: Acquiring products from a drop shipper allows you to sell products without storing inventory. In this arrangement, your product costs will often involve “drop fees,” along with any monthly or transactional fees incurred by your product supplier.
- Purchase products outright: You can also purchase products directly from a manufacturer or wholesaler. If you choose this option, your product costs will include the price of acquiring the product, the cost of storing it as inventory, as well as any upkeep and shipping.
While there are lots of areas to consider when it comes to market research, embrace the opportunity to learn as much as you can about your products’ marketplace and the overall industry. Doing so will only improve your chances of successfully selling online – as they say, knowledge is power!
UPC codes Need To Use Them!
Most selling platforms now use product catalogs for their search engines. The product must have a UPC code or it will not appear in the product catalogs. Long story short, Use a real UPC code that actually identifies the product. That means if your product does not have a UPC code it’s not going to show in search.
One of the biggest mistakes you can make when launching your online business is to ignore the pricing of your products. Far too often, online retailers arbitrarily set their product prices, or even worse, base their decisions solely on what their competitors are charging. The problem with this approach is that you’re not factoring in various costs and other offerings that are unique to your business. In a worst case scenario, this can lead to you not making enough money to cover your operational costs.
That’s why it’s so important to put some thought, and yes some math, behind your pricing decisions. So get out your calculators, because it’s time to walk through the four-step process of how this works.
Step One: Calculate your overall product cost
Before settling on a price, calculate the overall product cost, or breakeven point, by adding all of the costs associated with your product, such as product costs, shipping fees and more.
Here’s an example for a product you might be offering:
Product cost: $5.00
Shipping fees: $1.00
Credit card processing fees: $0.25
Listing fees: $1.25
Labor: + $0.25
Overall Product Cost: $7.75
Step Two: Account for your revenue goals
After you determine how much you need to break even on a product, the next step is to decide the profit you need to earn on that product to meet your overall revenue goals. To do so, take the following steps:
- Set your monthly net profit goal for the sale of all products, For example, let’s say you want to earn $10,000 a month profit off your entire product line.
- Break down your monthly net profit goal into monthly net profit goals for each productContinuing with this example, if you’re selling four products total, you may have a goal of $2,500 profit per month for each product to contribute toward your overall goal of $10,000/month profit.
- Estimate the total number of each product you expect to sell per month you expect to sell 250, 500 or 1,000 units?
- Divide your monthly net profit goal for each product by the total number of product items you expect to sell per month For example, if you want to earn $2,500 on the sale of 500 items, $2,500 ÷ 500 = $5/item
- Add the profit per item you found in Step 4 to the overall product cost you previously calculated Let’s say that a product’s total cost is $7.75, and you need to earn $5 per item to meet your revenue goal. This means, that to meet your net profit goal for this particular item, you need to sell it for no less than $12.75 ($7.75 + $5.00 = $12.75).
Step Three: Compare your prices to the competition
Once you strategically set the prices for your products, you should be in good shape as far as your business needs are concerned. However, you should also know that shoppers often find the product they want online and then search elsewhere for the best value.
This means that you should investigate competitor pricing by looking at some of the following sources:
- Similar websites: Search for websites that sell similar products and take note of their prices – are you on par with them, or way above/below?
- Comparison shopping engines (CSEs): CSEs are like search engines, but for products. Two leaders in CSEs are Google Shopping and Nextag. When you arrive at one of these sites, simply search for the product you’re selling to see a wide range of competitor price points.
- eBay and other auction sites: Spend some time on these sites to browse for your products, taking note of how much similar items are selling for at auction.
- Major retailers like Amazon: While you’re a much smaller business than these e-commerce giants, give them a visit to have a general gauge of the prices you’re going up against.
Once you have a better understanding of how your prices compare with the competitive landscape, you’ll be able to better position your products or make any necessary adjustments.
Step Four: Consider your business value and customer base
There’s much more to making a purchase than price – after all, not all shoppers are made alike, and not all businesses offer the same level of expertise and service.
That’s why, when setting your product prices, consider these additional factors:
- Customer motivation: What motivates your customers to make a purchase? Are they more concerned about price or dealing with a reputable business? Are they purchasing a “money-is-no-object” status item? Are they willing to pay more to get better service after the sale?
- Your value-add: Customers purchase more than just a product; they purchase an entire experience. Think about what value your business adds beyond the product itself. For example, you might offer stellar customer service, free returns or other educational/training resources. If you’re providing an extra something that your competitors aren’t, don’t be afraid to charge for it.
Pricing is admittedly an art and a science that can seem overwhelming at first, but never fear – it’s not as complicated as it sounds. Just remember that the time and effort it takes to diligently set your prices will help you immensely over the course of your online business, and avoid these two major pricing mistakes:
- Overpricing: Overpricing leads to lost sales and trust. In the world of e-commerce, your competitors’ sites are just a few clicks away, and online shoppers are definitely comparing prices. Thus, resist any urges of greed and ask, “Would this be a fair price to me as a customer?” Overpricing leaves you vulnerable to competitors willing to offer similar products at a lower price. If you do plan on charging more than the industry average for your item, make sure you have a good reason why, and communicate this to the customer!
- Underpricing: While pricing your products lower than your competition may be tempting, price wars lower profit margins for everyone, including you. Customers may even mistake your low price point for a cheap product, or even worse, a scam.
I strongly recommend having at least two suppliers for any new e-commerce store. Why is that?
Quotes From Professionals
“The #1 strategy for product validation is to do pre-sales. Email people telling them what you are going to make and when it’ll be delivered by. Ask for 5 orders at a specific price and see if people will buy. This will help you figure out if people want what you are making and if they don’t you can ask them what they’d pay for instead. Money is a truth serum.”
– Noah Kagan of SumoMe
“Is your product better than anything else on the market for the unique value it offers? If not, why are you wanting to sell it? It doesn’t have to be #1 overall in the market, but it should be #1 for whatever need around the product you’re trying to solve. There is little point in launching a product that offers the same value as other people already do, unless you specifically fill a marketing gap in the space. If you’re offering the same thing as other people already do, profits will likely be temporary, and capped. If you offer something that solves a specific need better than anyone else, profits are more likely to be long term, and more importantly, uncapped.”
– Billy Murphy of ForeverJobless
“One of my favorite strategies for coming up with product ideas is to take what I call a problem walk. If I’m stuck for ideas on anything, I’ll go walk around my hometown (or whatever city I’m in) and look for any problems or things that could be done better. I take a note, and try to have 25 before I go home.
This allows me to start thinking in the mindset of helping others and finding things that need to be fixed that I could potentially provide a solution for. It’s worked surprisingly well both for potential products as well as content.”
– Sean Ogle of Location 180
“When you are thinking about the kind of product you want to launch, think about your own life and answer some of the following questions: What are some products that you WISH you had? What type of product would make YOUR life better? Is there an existing product that you can tweak to make it better or more useful? And would others see the value in it, too?
When you are ready to test, it’s important to get feedback to validate your idea. It might be tempting to ask friends and family for their opinion, but that’s not the right way to go because friends and family will either totally support you and go along with ANY idea that you might have, or they might not support you as well. The best way to go about validating your product idea is to reach out to your IDEAL customer, ask them if they would actually buy it and then ask them specific questions about your products.”
– Andreea Ayers of Launch Grow Joy
Choosing the right product or product category can be instrumental to your success. The products you choose will shape your entire business, from marketing to shipping, to pricing, to further product development.
BULQ is Useful for products
For products, you can try BULQ
I have placed several orders here. Most of which were profitable. You will get some items that may not be good to sell online. Make sure the most items in your lot can be sold. I have a yard sale each year for the leftover items.